Abstract
The purpose of this study is to examine the economic impact of Covid-19 on the performance of micro, and small enterprises (MSEs) and cooperative institutions; how the strategies and formulate a recovery strategy in the new normal era. The main data used are primary data collected through interviews to MSE and microfinance institutions. The analytical method used is descriptive statistics and econometric models. The before and after analysis shows the significantly different costs and benefits of MSEs before and after the pandemic. The analysis shows that in the pandemic Covid-19 period, all MSEs decreased performance, most experienced a decrease in business turnover (6 percent) and similarly with cooperative institutions, their turnover decreased to 55%. The strategy of the cooperatives to maintaining its performance is to provide relaxation, improve efficiency by reducing employees, and ask for a reduction in profit-sharing payments to creditors; while the MSE strategy if the cooperatives does not provide loans for a while is 60 percent of MSEs seeking loans from relatives, 25 percent borrowing from other microfinance despite high-interest rates and 15 percent selling their household assets.
Highlights
The Covid-19 outbreak has caused tremendous negative impacts on various sectors, especially health and the economy
When compared to the condition of sharia cooperatives with conventional cooperatives, it appears that cooperatives in the form of sharia will be more able to survive during the Covid-19 pandemic because they use a profit sharia system
With the profit sharia system, the condition of the balance of Islamic cooperatives in times of crisis due to the Covid-19 pandemic will be elastic because the amount of costs allocated for profit sharing payments will decrease with a decrease in the income earned by Islamic cooperatives
Summary
The Covid-19 outbreak has caused tremendous negative impacts on various sectors, especially health and the economy. The slowdown in economic growth due to the implementation of large-scale social distancing (PSBB) policies such as social distancing and others has an impact on decreasing household consumption, investment, and exports as well as increasing unemployment and poverty rates. This policy is a precautionary measure to limit the spike in the spread of Covid-19 by controlling the movement of the community, such as dismissing school and work activities, restricting religious activities, and limiting activities in public places or facilities; it leads to disruption in the economy. Like the results of research in Pakistan, they found that, on average, weekly sales and household income both fell about 90% (Malik et al, 2020)
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